Seoul: South Korean stocks spiked to the highest level in about 11 months Wednesday amid optimism over the new government's policy direction, including plans for renewed talks with North Korea. The Korean won rose against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) rose 41.21 points, or 1.49 percent, to close at 2,812.05, marking the highest level since the 2,824.35 points on July 18 last year.

According to Yonhap News Agency, trade volume was heavy at 548.09 million shares worth 12.87 trillion won (US$8.7 billion), with gainers outnumbering losers 570 to 313. Foreign and institutional investors bought a net 916.56 trillion won and 280.5 billion won, respectively, while individuals sold a net 1.19 trillion won.

President Lee Jae-myung began his five-year term on Wednesday, pledging to resume dialogue with North Korea and strengthen trilateral security and economic ties with the United States and Japan. Analysts noted that the KOSPI was also buoyed by softer-than-expected U.S. economic data, including a contraction in the services sector, which raised expectations that the Federal Reserve could cut interest rates to support growth.

Most large-cap stocks advanced, with market bellwether Samsung Electronics rising 2.25 percent to 59,100 won, and its rival SK hynix jumping 3.22 percent to 224,500 won. Top carmaker Hyundai Motor climbed 1.94 percent to 189,600 won, and defense firm Hanwha Aerospace Industries jumped 7.1 percent to 905,000 won. Leading battery maker LG Energy Solution rose 0.87 percent to 291,000 won, and No. 1 steelmaker POSCO Holdings was up 4.68 percent to 257,000 won.

Among the few losers, state-run utility Korea Electric Power Corp. fell 1.01 percent to 29,350 won, and leading shipping firm HMM declined 4.21 percent to 21,600 won. The local currency was quoted at 1,358.40 won against the greenback at 3:30 p.m., up 11.1 won from the previous session and marking the highest since October 14, when the comparable figure was 1,355.9.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 0.2 basis point to 2.412 percent, and the return on the benchmark five-year government bonds declined 0.5 basis point to 2.597 percent.